Oil & Gas
Enhanced Oil Recovery (EOR) — Cost Treatment
Recording the cost of a chemical EOR program injecting surfactants to increase oil recovery.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| EOR Asset (Capitalized — Future Economic Benefit) | Asset (+) | 8,000,000.00 | - |
| Cash / Chemicals Supplier | Asset (-) | - | 8,000,000.00 |
💡 Accountant's Note
EOR costs are capitalized when the injection program can be demonstrated to increase total recoverable reserves. If the expenditure only maintains current production rates, it is expensed as a lifting cost.
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